UBS Staff Found Illegally Punting Client Money

Another hit to UBS’s credibility. Turns out UBS employees had been making thousands of unauthorised trades using their client’s money, then concealing the losses.

Shouldn’t there be controls for something like this in one of the premier wealth managers?

The U.K.’s Financial Services Authority recently released the following:

FSA: The Financial Services Authority (FSA) today fined UBS AG (UBS) £8million for systems and controls failures that enabled four employees to carry out unauthorised transactions involving customer money on at least 39 accounts.

The unauthorised activity, which took place between January 2006 and December 2007 at UBS’ London-based wealth management business, only came to light when a whistleblower raised concerns internally.

Upon further investigation, it was discovered that UBS employees had taken part in the trading of foreign exchange and precious metals using customer money without authorisation and allocated losses to customers’ accounts. An internal UBS investigation estimated that as many as 50 unauthorised transactions a day were taking place at the operation’s peak.

Read more here.

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